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October 17, 2018

Bar Harbor to sign lease with Bay Ferries, setting stage for CAT to leave Portland

Courtesy / Bay Ferries Ltd.
Courtesy / Bay Ferries Ltd.
The high-speed CAT ferry that once shuttled daily between Bar Harbor and Yarmouth, Nova Scotia, is now set to begin plying that route again next summer, following a vote Tuesday by the Bar Harbor Town Council. .

Bar Harbor Town Council voted unanimously to authorize a five-year lease agreement with Atlantic Fleet Services Corp., allowing it to contract with Bay Ferries Ltd. to reinstitute high-speed ferry service between Bar Harbor and Yarmouth, Nova Scotia.

The vote at the Oct. 16 council meeting sets the stage for the CAT high-speed ferry service to move from Portland to Bar Harbor by next June.

The vote also allows the Prince Edward Island company to start site work, pending agreement by the state of Maine and any other required parties. The state still owns the Eden Street ferry terminal where Bay Ferries would operate the CAT.

The town and the Maine Department of Transportation are scheduled to close on the purchase of the property Nov. 30.

The Bay Ferries lease term is from Dec. 1 to Oct. 30, 2023. The lease agreement includes an option for Bay Ferries to extend the lease for two years, to 2025. The agreement designates a customs operations area, terminal building area and ferry operations zone, where Bay Ferries will make improvements to the areas at its own expense. It also designates 50 parking spaces for Bay Ferries use. It specifies that Bay Ferries would conduct ferry operations based on a mid-day arrival in Bar Harbor, with departure at or about 3 p.m.

Bay Ferries currently runs the CAT, a 349-foot catamaran, between Nova Scotia and Portland. The Portland-to-Nova-Scotia service would be discontinued when service from Bar Harbor begins.

An attached schedule of rents and fees specifies rent of $4,500 per month in non-operating months, and $7,500 per month in operating months, with Bay Ferries to pay the costs of heat, utilities and related services during operating months. Plus there are per-unit fees of $2 per passenger, $3 per vehicle and $20 per bus.

Goal: Establish ferry run by June

By way of illustration, the schedule says that rents and fees for 60,000 passengers, 24,000 vehicles and 40 buses during the operating months of June through November, plus rents for the non-operating months of November through May, would come to $261,800 for one year.

In a phone call conducted with the council during their meeting, Bay Ferries Ltd. CEO Mark MacDonald said the goal is to be operating by June 2019.

In his update, MacDonald said the company's due diligence process is nearing completion. The company has undertaken a close physical examination of the property's north pier with a team of engineers from inside and outside the company. A technical plan that's emerging includes installing additional pilings along the face of the pier, on the 75-foot section closest to shore. The additional piling would be needed to absorb the berthing energy of the ship when it's coming to dock. Pilings further out in the direction of the water are in excellent shape, he said. But the company foresees possible repair work to be done underneath the surface of the dock.

All of the work would be undertaken at Bay Ferries' expense, he noted.

Concerns over town taking on debt

MacDonald said Atlantic Fleet Services owner Annette Higgins met with U.S. Coast Guard representatives earlier in the day to discuss the process for obtaining approval for the facility's security plan.

The goal is to begin work "immediately or very shortly," he said.

Council Chairman Gary Friedmann noted the work would begin before the town actually owns the property, thus requiring the state's approval.

Among commenters at the meeting, one man said the council was wrong to engage with Bay Ferries before it had studied the financial benefit of developing a marina and park at the site.

But others supported the five-year lease as a revenue generator that will also result in Bay Ferries' significant capital investment in the site. After the five years, they said, the town can reconsider the matter. In the meantime, the five-year period gives the town time to develop its plan for the remainder of the site, they said, adding that, without Bay Ferries, the site would simply lie fallow.

"We as a town have taken on a real deep debt here," resident Peter St. Germain said of the $3.5 million bond the town is taking on to pay the state to purchase the site. "You have a fiduciary responsibility to do what's best for the town. There's no doubt that this proposal is in fact a five-year benefit for the town."

"I don't see a downside," said Councilor Judie Noonan. "We'll still be able to develop it. In the meantime, we can have the site being active and productive without being an eyesore" and with money coming in to pay the bond.

The council's Oct. 16 meeting can be viewed on the town's website.

The council voted last July to negotiate with Bay Ferries regarding its proposal to reinstitute ferry service between Bar Harbor and Nova Scotia. The company said it would make $3 million in improvements to the property, including a dock ramp, pilings, building renovations and parking upgrades.

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